US Steel rejects Cleveland-Cliffs’ $7.3 billion bid
European HRC market quiet amid seasonal closures
Fastmarkets calculated the daily steel HRC index, domestic, exw Northern Europe at €644.58 ($705.43) per tonne on Monday, unchanged from Friday August 11.
The Northern Europe index was down by €1.25 per tonne week on week and down by €27.67 per tonne month on month.
Seasonal effects and weak demand resulted in a flat market, sources said.
In the week to August 11, most buyers’ estimates of a tradable price were in the region of €620-650 per tonne ex-works.
Fastmarkets’ calculation of the daily steel HRC index, domestic, exw Italy was €633.68 per tonne on Monday, also unchanged from Friday.
The Italy index was down by €2.57 per tonne week on week on Thursday, and down by €21.32 per tonne month on month.
In the week to August 11, buyers’ estimates of workable prices for HRC for delivery in September-October were reported at €630-640 per tonne ex-works.
No fresh import offers were reported on August 14.
Published by: India-Inés Levy
ArcelorMittal Poland eyes two BF operation following restart
ArcelorMittal Poland (AMP) has completed the revamp of its Dabrowa Gornicza plant’s blast furnace no.2 and blown the unit in, the firm says.
The work, which began at the end of March, included the replacement of the furnace hearth refractory lining as well as the construction of a new cooling system and modern gas treatment plant. It will result in the reduction of 45,000 tonnes/year of CO2 emissions. Moreover, electricity consumption has been lowered nearly 400 MWh per year and over 18,000t of dust are recycled and reused in the steelmaking process.
The firm tells Kallanish it now plans to operate both blast furnaces at Dabrowa Gornicza and has no intention of idling either one. BF3 was restarted in January, following its idling last September due to weak demand, in preparation for the shutdown of BF2 for revamping, which cost PLN 720 million ($167m).
AMP saw crude steel production fall 15% on-year in 2022 to 3.4 million tonnes, thereby dropping below 2020-pandemic output of 3.9mt.
Adam Smith Poland
LKAB deliveries drop, foresees increased costs, operational disruptions
Iron ore prices remain at high levels despite their decrease in the first half of 2023, but uncertainty remains over global economic development, says LKAB. The miner is seeing a general increase in costs of energy, inputs, materials and services, while works on the Ore Railway during summer could continue to limit production and delivery capacity.
LKAB’s iron ore deliveries fell 6% on-year in the second quarter to 5.8 million tonnes, with an 81% proportion of pellet versus 82% a year earlier, Kallanish notes.
Iron ore production was down 7% to 5.3mt, affected by scheduled maintenance shutdowns, production disruptions and a shortage of crushed ore in Kiruna.
The average global spot price for iron ore products in Q2 was lower than in the same period last year, at $111/tonne versus $138/t a year earlier. This was also down $14/t on Q1. Quoted pellet premiums for the quarter were $30/t lower on-year.
Net sales plummeted 24% in Q2 to SEK 9.35 billion ($862.6 million) and net income was down 28% to SEK 3.05 billion. Earnings were impacted by lower prices for highly upgraded iron ore products and lower delivery volumes. They were also affected by higher prices for energy and other inputs, which accounted for 25% of increased costs, as well as lengthy scheduled maintenance shutdowns, measures to secure production capacity and increased exploration.
Production in Kiruna was limited by difficulties in transporting crushed ore from other mines. During the summer, extensive maintenance work was also carried out on the Ore Railway, further reducing transport capacity. Mining in Svappavaara, therefore, had to be curtailed during the summer.
The tribunal at the European Court of Justice has meanwhile delivered its judgment in the case concerning LKAB’s exclusion from the benchmark for sintered ore in the Emissions Trading System (ETS). The Court found that the European Commission was not in error in rejecting LKAB’s inclusion in the benchmark, according to the provisions of the ETS directive that were applicable at the time. LKAB is analysing the verdict and considering whether there are grounds for appeal, the miner concludes.
Adam Smith Poland
Liberty Steel to idle Dunaferr blast furnace
Liberty Steel is idling the remaining working blast furnace – no.2 – at Dunaferr because production costs are not economically feasible amid the current low steel prices, informed sources tell Kallanish.
The global steelmaking group acquired the insolvent Hungarian steelworks in an auction last month (see Kallanish passim).
In a letter to Dunaferr employees last week, management wrote: “The mill has been saved, but it should be put in order, to be prepared for a sustainable and green future to provide working places for those working at the mill. We are now working on the plan to switch to the production of GREENSTEEL, and as soon as approval from EU authorities is given, the work can begin.”
The letter also says Liberty will continue to pay the salaries of employees, while it develops retraining programmes, according to its legal obligations. The furnace shutdown is expected to last three months.
Liberty declined to comment.
BF2 was restarted in February after being idled last year amid Dunaferr’s well-publicised financial troubles.
According to reports last month following Liberty’s Dunaferr acquisition, investment exceeding $100 million will be required to regain the steelworks’ environmental protection permits necessary for operation.
In 2020, the last year for which Dunaferr published production data, it recorded crude steel production of 1.18 million tonnes, despite widely reported operational problems in the second half of the year. This was down 19% on-year. The firm’s BF1 remains idle since last summer.
Adam Smith Poland
Salzgitter expects safeguard non-renewal, Section 232 reapplication risk
“It will then be possible to import steel products into the EU market from July 1, 2024 onward without any restrictions by tariff quotas, which will likely drive up import volumes,” the steelmaker said in last week’s second-quarter earnings report.
EU steelmakers have in recent months voiced fears over the potential expiration of safeguard measures in mid-2024, with the EU’s Carbon Border Adjustment Mechanism (CBAM) due to come into full force only on 1 January 2026. This would leave an 18-month gap that would see the EU’s market unprotected, Kallanish notes.
According to WTO rules. safeguard measures can be implemented for a maximum of eight years and then must be rescinded for the same duration as they were applied before they can be re-applied.
Their renewal is likely to depend much on whether the EU and US can agree a steel trade pact, the Global Sustainable Steel Agreement (GSSA), which is currently under negotiation. If no deal is agreed by the October deadline, the US could reapply Section 232 duties on EU steel. “The various negotiation positions are currently still very far apart, which makes arriving at a consensus by October 2023 difficult. The loss of preferential market access to the US would considerably hamper exports again,” Salzgitter says.
As for the EU’s sanctions on Russian steel, importing steel products of Russian origin processed in non-EU countries will be prohibited as from October 2023; importing semi-finished products will no longer be possible starting with October 2024.
“Risks arise from the new sanctions to the extent that the long transition periods through to autumn 2024 continue to facilitate Russian steel imports that are frequently offered at prices significantly below the customary market price level. Owing to the complexity of the directive and the difficulty in its implementation, this risk continues to prevail and may lead to distortions in the market on the back of low prices for Russian steel products,” Salzgitter observes.
The German steelmaker saw shipments drop 3% on-year in the second quarter to 1.32 million tonnes.
Adam Smith Poland
Quiet conditions persist in European HRC market amid seasonal closures
Fastmarkets’ daily steel HRC index, domestic, exw Northern Europe, was calculated at €644.58 ($708.89) per tonne on Friday, unchanged from the previous day.
The Northern Europe index was down by €1.25 per tonne week on week and down by €36.25 per tonne month on month.
Summer holiday absences resulted in no new trades being reported.
Earlier this week, on Wednesday, most buyers’ estimates of a tradable price were in the region of €620-650 per tonne ex-works, but one buyer source reported a higher estimate of €650-680 per tonne.
Fastmarkets’ calculation of the daily steel HRC index, domestic, exw Italy, was €633.68 per tonne on Friday, also unchanged from the previous day.
The Italy index was down by €2.57 per tonne week on week on Thursday, and down by €27.57 per tonne month on month.
Earlier in the week, buyers’ estimates of workable prices for HRC for delivery in September-October were reported at €630-640 per tonne ex-works.
No fresh import offers were reported on Friday.
Published by: India-Inés Levy
Steel rebar, wire rod prices stable in Poland amid lack of activity
Rebar
The most recent rebar offers from three local producers were heard at 2,660-2,680 zloty ($656-661) per tonne CPT (about 2,630-2,650 zloty per tonne ex-works), while estimates of workable prices were in the range of 2,600-2,650 zloty per tonne ex-works, depending on the tonnage.
No fresh bookings had been heard by the time of publication.
Consequently, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, exw Poland, was 2,600-2,650 zloty per tonne on August 11, stable week on week.
Wire rod
Recent offers from local steelmakers of low-carbon, drawing-quality wire rod were reported at 2,800-2,900 zloty per tonne CPT, unchanged since late July, but the upper end of that range was considered unworkable by most customers.
Workable prices were estimated to be around 2,750 zloty per tonne CPT, with some deals from a key producer heard at this price.
Fastmarkets’ weekly price assessment for steel wire rod (drawing quality), domestic, delivered Poland, was 2,750-2,800 zloty per tonne on August 11, unchanged over the past month.
Offers of wire rod imports into Poland were also limited in the assessment week, with European mills out of the market for maintenance work or other stoppages.
Ukraine-origin mesh-quality wire rod was heard to be available at €600-610 ($660-671) per tonne CPT, depending on the supplier.
Published by: Vlada Novokreshchenova
Swiss Steel’s sales weaken in first half
In the first half of 2023, Swiss Steel’s business environment was negatively shaped by factors such as a slowdown in the global economy and rising interest rates to counter inflation.
“Our main customer segments, the automotive industry and the mechanical and plant engineering sector, continued to be affected by the global distortions,” Kallanish hears from the company. Incoming orders as well as order backlog continued to decline in H1, due to lower market demand combined with destocking by the company’s customers.
Sales volume decreased considerably, leading to lower revenue despite ongoing high prices.
Swiss Steel shipped 756,000 tonnes across all product groups and sites, versus 937,000t in the same period of last year.
Volumes decreased at all its divisions, with the strongest dip suffered by the Tool Steel Division, down 32%. The Engineering Steel Division was also considerably below the prior half-year, down 20%, on the back of a lower sales volume in the automotive industry. This particular drop could have been caused by the rise in electric car production, which requires fewer components of speciality long products as made by Swiss Steel.
After a prolonged period of price increases, prices per tonne of steel fell in H1. However, at €2,460/tonne ($2,704), the average sales price is still higher than that achieved in H1 2022 –€2,290/t. An improved product mix, with a higher share of stainless steel in the product portfolio, as well as higher alloy surcharges led to this effect.
The group’s revenue declined by 14% to €1.86 billion, spread across all divisions, with the strongest decline seen in the Engineering Steel Division, down by 22%. By region, revenue decreased in all markets, except in America. Adjusted Ebitda dropped from €171 million to €70m.
Christian Koehl Germany
SSAB implements layoffs at Finnish sites
SSAB says it has completed negotiations regarding temporary layoffs initiated by its Finland business unit in June. Layoffs of varying duration will take place starting in September, Kallanish learns from a statement sent upon request.
Continued weak market conditions for construction-related products caused the group to initiate what it called “change negotiations” at its Finnish sites in Hämeenlinna and Kankaanpää (see Kallanish 19 June). The negotiations concerned around 800 people in total at the two sites, excluding the pipemaking operations at Hämeenlinna. Allocation of layoffs depends on the function and development of the market and work load situation.
“During the negotiations, there has been no change in the market situation for the better, which is why we unfortunately have to implement layoffs in order to adjust the capacity and cost structure of the operations to match the predictable load situation,” says Anders Ek, SSAB Europe director responsible for production at the Hämeenlinna and Kankaanpää sites. Earlier, he noted that market conditions are especially difficult for colour-coated products for the construction industry.
SSAB employs about 4,700 people in Finland. The furloughs affect more than 700 employees at Hämeenlinna, and the entire personnel at the Kankaanpää plant.
Christian Koehl Germany